THE DEMAND FOR CURRENCY 73 
if you occupy a £1,000 house than if you occupy a 
£2,000 house, so you are a less important demander 
of currency if you keep on the average £5 in your 
pocket than if you keep £10. 
The usual talk of “ velocity of circulation *’ is only 
a clumsy attempt to express this truth. If we say 
that additional sales and purchases may be effected 
without alteration in the value of money provided the 
velocity of its circulation is increased, we may equally 
say that additional transfers of houses may be 
effected without altering the value of houses, provided 
the velocity of the circulation of houses is increased. 
We do not say that, because the futility of it would 
be obvious ; it is so much simpler to disregard both 
the transfers and the velocity of the circulation of 
houses and come at once to the ultimate demand, 
the demand for houses to hold. 
It may be said that, in addition to the demand of 
persons and institutions for currency to kold, there is 
also sometimes a demand by banks and governments 
for currency to destroy, as, for example, happens 
when the bank or the treasury is reducing the 
aggregate amount of notes outstanding. But as this 
demand always, or almost always, comes from 
institutions which have issued quantities of paper 
and subsequently repented, it is usually regarded as 
simply reducing the supply instead of increasing the 
demand. In favour of regarding the institution as 
a demander, it may of course be said that the fact 
that it acquires the currency to burn rather than to 
hold is immaterial, since it makes no difference 
whether the currency acquired is held or burnt, 
provided it is not reissued. It is, some one may say, 
all the same whether notes which have been with- 
drawn have been cancelled or are still held by the 
issuers uncancelled. But this is not quite true, 
since, if the notes were still held, they would appear